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Archive for the ‘civil procedure’ Category

Another B.C. case dealing with enforcement of foreign judgments came to my attention today. It is a two-part decision by Mr. Justice Myers in Marx v. Balak. The first part addresses the defendant’s applications to refuse enforcement because of breaches of natural justice and fraud (2008 BCSC 195). The second addresses an application to stay or defer the proceeding while the defendant applies to set aside the original default judgment in Utah (2008 BCSC 222).

Many thanks to Mr. Pribetic, who has directed my attention to Liu v. Huang, 2008 BCSC 288, a recent decision of the BCSC declining jurisdiction in favour of Taiwan. While the parties resided in Vancouver, at least part time, the dispute concerned debt that arose and was supposed to be repaid in Taiwan.

What do chicken legs have to do with forum non conveniens? Not much, except that they led me to learn that Delaware forum non conveniens rules appear to be fundamentally different from our own. The case of Certain Underwriters at Lloyds … v. Tyson, 2008 WL 660485 (Del. Super. March 7, 2008) dealt with the defendant insured’s motion to dismiss or stay the plaintiff underwriter’s Delaware declaratory action to deny coverage, as its own claim for coverage was proceeding in Mississippi. The main subject matter of the claim was “damages totaling $113,529,815 [arising out of hurricane Katrina] … allegedly lost in the global chicken leg quarter markets [and] … property loss or damage to hatcheries, equipment, and disposal of dead chickens.”

Tyson’s motion was based on two forum non conveniens arguments: (1) Delaware action should be stayed because both actions were contemporaneously filed and thus the plaintiff cannot rely on the first to file rule; and (2) if Delaware action was filed first, then it should be dismissed or stayed as imposing an “undue hardship” on Tyson. The court dismissed both arguments, finding that the Delaware action was filed first and that forum non conveniens factors favoured the plaintiff.

In Suncom, the plaintiff brought a Rule 18 application for summary judgment to recognize and enforce a default judgment obtained in Nevada. The relatively unusual aspect of this case was that it was brought under Rule 18, rather than Rule 18A, showing that the plaintiff had a very high degree of confidence in its case, arguing that “there is no defence to the whole or part of a claim, or no defence except as to amount” and deposing that it “knows of no fact which would constitute a defence to the claim.” To successfully defend against this application, the defendants merely had to show a “bona fide triable issue”.

The defendants in fact argued three triable issues, all rooted in Beals v. Saldanha, 2003 SCC 72: (1) lack of real and substantial connection between the Nevada court and the defendants, despite the presence of a jurisdiction selection clause; (2) defence of fraud; and (3) defence of public policy.

Master Scarth held that none of the defendant’s arguments raised a bona fide triable issue. With respect to jurisdiction simpliciter of the Nevada court, relying on Beals and Z.I. Pompey Industries v. ECU-LineN.V., 2003 SCC 27, she held that a jurisdiction selection clause demonstrates a prima facie real and substantial connection and must be enforced by the court in the absence of “strong cause to the contrary”. The defendants’ argument that the work under the contract was not performed in Nevada did not raise a “strong cause” as a triable issue. Relying on Zaidenberg v. Hamouth, 2005 BCCA 356, she concluded “that there is no triable issue relating to the defence of fraud, in that it is clear that there is no new evidence supporting the fraud defence which was not discoverable with due diligence prior to the default judgment being granted.” Finally, with respect to the argument that the Nevada judgment was contrary to the “Canadian concept of justice” because it included prima facie compensatory punitive damages, relying onOld North State Brewing Co. v. Newlands Services Inc. (1998), 58 B.C.L.R. (3d) 144, she concluded that “whether punitive damages are included in the judgment or not, there is no issue which merits a trial on that point” as “award of … punitive damages, cannot be considered to be contrary to the public policy of British Columbia”.

In the common law provinces, chaining of foreign judgments may be possible. I.e., find a province that has a reciprocation agreement with the state from which you have a judgment, register the judgment in that province, and then register and enforce the now provincial judgment in your home province as a Canadian judgment. At least that’s the theory.

The practical problem is that across Canada, provinces have a very limited numbe of reciprocation agreements with U.S. states and other countries. A while back I had to investigate the possibility of chaining and as a result compiled a handy table, which includes all provinces (except Quebec), their applicable acts, and the states/countries with which they have reciprocation agreements.

Of interest is that B.C. has can register judgments from the greatest number of states: Washington, Alabama, California, Oregon, Colorado and Idaho, as well as Australia, Germany, Austria and UK; Alberta has agreements with Montana; and Manitoba is the only Canadian province with a reciprocation agreement with France.

In my naiveté, I thought that it was now trite law in Canada that limitation periods are substantive law and thus are governed by lex loci delicti, i.e. the law of the place where the wrong has occurred. However, life is never this simple. As a recent decision of the Nova Scotia Court of Appeal in Vogler v. Szendroi, 2008 NSCA 18shows, even when it comes to limitation periods, some things can still be deemed to be procedural and thus be governed by lex fori.

At issue in this case was not a foreign limitation period, which the parties conceded was a matter of substantive law and thus governed by lex loci delicti, i.e. Wyoming, but rather the rules for service and commencement of an action. Specifically, R. 3(a) of the Wyoming Civil Procedure Rules provided that “for purposes of statutes of limitation, an action shall be deemed commenced on the date of filing the complaint … If … service is not made within 60 days the action shall be deemed commenced on the date when service is made.” As service was not made within 4 years of the accident, the defendant succeeded in chambers in arguing that the claim was statute barred because the action was not commenced within the limitation period.

On appeal, the court disagreed. After reasonably holding that the distinction between procedural and substantive law is evaluated from the perspective of lex fori, the court concluded that because the Wyoming rule described the how, rather than when the action was to be commenced, from the perspective of Nova Scotia law it was properly characterized as procedural and thus inapplicable in N.S. courts:

26 Returning to the ultimate question of whether Rule 3(b) is substantive or procedural, we must draw our attention to the true subject matter of the impugned provision. In other words, is s. 3(b) about timing as the respondents suggest, i.e., concerning when an action must be commenced? If so, and given its alignment with Wyoming’s four-year statutory rule, it would appear to be more substantive than procedural in nature. On the other hand, the appellant suggests that this provision is not about timing but about methodology. In other words, it describes the manner in which an action is (or is deemed to have been) commenced. That would be a subject matter more akin to procedure.

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28 Respectfully, I believe that the Chambers judge erred by misreading the provision’s true subject matter. He found that Rule 3(b) prescribed when an action had to be commenced. In other words, he found it to be integral to the four-year limitation provision and thus substantive in nature. Respectfully, despite its title, “When commenced”, I do not read the provision that way. Instead I view it as simply directing the manner in which an action is commenced. Let me elaborate.

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34 … In my view, this introductory phrase in Rule 3(b) simply identifies the rationale for the provision. In other words, Rule 3(b) sets out the process for complying with statutory deadlines for filing actions. In this case, the limitation period is four years and that is prescribed by statute. Nothing in Rule 3(b) changes that. Again, it simply directs how one can comply with this prerequisite. In summary, Rule 3(b) is not about how long you have to file a claim; it is about how a plaintiff commences a claim.

Alas, it is exactly as my conflict of laws professor told us: there is always more than one way to characterize a matter, even if apparently the same matter has been characterized before.

Update: this case has also been discussed at conflictoflaws.net, an international conflict of laws journal/blawg.